Rail minister indicates fare hike is coming

Rail minister indicates fare hike is coming

Rail minister indicates fare hike is coming

Union Minister of Railways C P Joshi has decided to set up a Rail Tariff Authority to determine passenger and freight fares, indicating that the controversial process of fare revision has begun.’

“The proposal will soon be sent for the approval of the cabinet,” said Joshi on Monday.
“We have decided it in principle to set up an independent authority to determine the tariff. People should know the gap (in earning and expenditure),” said Joshi while addressing the Economic Editors Conference organized by the Press Information Bureau.
He refused to give any timeframe for setting the authority and assured that all stakeholders would be involved.  

Railway Board chairman Vinay Mittal also, in his presentation, strongly pleaded the case and raised the issue of “viability” of rail services. He said the fare authority is being set up to eliminate uncertainties in tariff formulations. “We need money,” he asserted.

The direction in which the new railway minister is heading is well indicative of a steep hike in passenger fare. He declared that reports of both the committees, Sam Pitroda committee on modernisation and Anil Kakodkar committee on safety, “are being actively deliberated on”. Both the committees were formed by Dinesh Trivedi, but his successor Mukul Roy made it a point to ignore the reports.

The committees have recommended hike in passenger fare along with other measures to modernize railways. These measures include large scale privatisation and disinvestment of railways among others.

As for the passenger fare hike, both committees were vocal in opposing any moratorium on raise. The Pitroda committee recommended modernisation surcharge on per kilometre basis, while the Kakodkar committee calculated  a safety cess which should generate Rs 5,000 crore every year. He also recommended safety cess .

“For suburban passengers, safety cess has been assumed at Rs 3 per ticket, for non suburban unreserved tickets it has been assumed at Rs 6 per passenger, for reserved sleeper class it has been fixed at Rs 10 per ticket, for AC Sleeper /AC Chair car it is assumed at Rs 20 per ticket, for AC Sleeper Rs 30 per ticket and for AC First Rs 50 per ticket,” recommended the Kakodkar panel.|

Fare and just

* Pitroda committee: Modernisation surcharge on per km basis.
* Kakodkar committee: Safety cess which would generate Rs 5,000 cr every year.